Thursday, June 13, 2013

The Diamond Lab System Is Broken. How Do We Fix It?

The issue of variable lab diamond grading standards has been
around for a while, but it seems to be dominating trade chatter in a way
that it hasn’t before. Undoubtedly, there are some good labs out there.
But the problem is most consumers don’t know the good graders from the
lenient ones. And the whole system of labs, meant to raise standards in
the trade, now seems to be aiding and abetting misrepresentation as much
as preventing it.So the question is: What should we do about it?We covered some possible solutions in our June story. The recent Rapaport conference offered a few more, which I would like to review.
Martin
Rapaport—who, we should note, is looking into launching his own
lab—believes this is an opportunity for jewelers to use their expertise
to differentiate themselves and win customers. And so we see retailers
like Dan Gordon using blogs to explain their opinions on different labs.
There
is merit to this. But lately we have seen a lot of well-respected
jewelers—people who have the reps and expertise—selling diamonds with
reports from "lenient" labs, simply because their competitors carry
them, and they feel they have no choice. So at this point, the situation
may be a little too far gone for even the best retailers.
The
other oft-mentioned solution by Rapaport is a class action lawsuit.
Simply sue the worst offenders out of business, and the rest of the
trade will pay attention. Yet it’s possible that some of the targeted
entities may be overseas—and of course, the consumer confidence aspects
of that would be disastrous.
Other solutions include having an
outside group judge industry graders—and there are organizations
dedicated to doing just that, such as the International Standards
Organization and the Laboratory Accreditation Bureau, which looks at
food and crime labs. This makes sense; the whole point of having labs is
that jewelers and dealers can’t be trusted to grade their own diamonds.
So why should an organization, or business owner, be allowed to grade
their own lab? In the past, certain groups have said they don’t need to
be judged by outsiders, as we have the reputation and stature. That
doesn't cut it anymore. Every lab in our business should be subject to
independent review.
My feeling has always been that, down the
road, grading needs to be mechanized—meaning the grading needs to be
done mostly by machines, with some quality control by humans. After all,
you can’t bribe a device. They don’t—or shouldn’t—get tired after
grading too many stones. And if they are programmed properly, they will
give you consistent results, and really that’s what grading needs most:
consistency.
Right now, we have things we call
“certificates.” But we all know they don’t really certify anything.
That’s because diamond grades are subjective. We need a way to make grading more objective—and
consistent. At the Rapaport seminar, moderator Saville Stern noted that
two of the test stones had been graded previously by GIA. When
re-submitted, they received different grades—showing that even a lab
which operates with the best of intentions doesn’t always generate
repeatable results.
Both De Beers and to some extent GIA use
proprietary devices in their color grading; given that consumer
confidence is important to both organizations, perhaps it’s time to make
those machines available to the industry at large. The idea that
someone’s opinion—or even the best of three opinions—can mean a
thousand- or even-million dollar difference in the value of a stone
seems pretty outdated in this day and age. (This, of course, may cost
people jobs. But good gemologists will always be needed for quality
control and to spot things like treatments and synthetics.)
Granted,
a reliable, widely-embraced clarity-grading machine will prove a little
tougher to develop than a color-grading one. But I don’t think it’s
impossible (De Beers has one in development). And even if only color
grading gets mechanized, that will be a huge improvement, as color seems
to bring the most grading variations, and lenient labs will only have clarity to “play” with.With
the exception of cut, the current system for grading and evaluating
diamonds was developed in the early 1950s. Perhaps, 60 years later, it’s
time to modernize it, and figure out a system that truly serves the
consumer and honest people in the industry. The current situation of
“good” and “bad” labs is embarrassing and will ultimately damage our
business. If we’re lucky, however, it will lead to a period of
innovation and fresh thinking in the grading sector.Source: jckonline